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As a college freshman managing your own housing expenses, learn to compare different options using annual worth analysis to make informed financial decisions. Evaluate factors like actual housing, transportation, and work housing to determine the most cost-effective choice.
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Living Spaces A Group 8 PresentationKristoffer Carino Peter Masangcay, Dean Tablang, Malena Walker
Scenarios • You are a college freshman planning out your college career. Your tuition and books are covered but you have to take care of your own housing. A loan will be needed, so you compare the alternatives using annual worth analysis.
Criteria • Actual Housing • Transportation • Work
Housing • Apartments • 4 total people, so $287.5 per month. But a $125 annual increase in rent • $175 monthly for food • Graduate in 4 years • Dorms • $3775.50 annual • Meal plan included • Graduate in 4 years
Transportation • Apartments • $5000 car, $30/month maintenance, 30mpg • Initial gas cost $2.50 • Salvage value of $1500 • Dorms • Bus/Train pass $58, with $2 increase every year
Work • In either case, 50% of your salary will go to help pay for your housing. • Apartments • Off campus job $9.00/hour, $100 raise every year, 8 hour work week • Dorms • On campus job $8.00/hour, $150 raise every 6 months, 10 hour work week
Sensitivity Analysis • In the previous case the dorm costs were about $1500 less than living in an apartment. For this next case we modify the living situation to get a lower EUAC for apartment living. • For our scenario • Lower Rent Apartment • Lower Grocery Bill • Car given to you by parents • Slightly Higher Fuel Consumption • Higher Maintenance Costs • No Income accounted for.
Helpful Websites • www.yahoolocal.com • www.stp.uh.edu • www.csupomona.edu • www.consumerguide.com